Correlation Between KIMBALL ELECTRONICS and LANDSEA GREEN

Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and LANDSEA GREEN at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KIMBALL ELECTRONICS and LANDSEA GREEN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KIMBALL ELECTRONICS and LANDSEA GREEN MANAGEMENT, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and LANDSEA GREEN and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KIMBALL ELECTRONICS with a short position of LANDSEA GREEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and LANDSEA GREEN.

Diversification Opportunities for KIMBALL ELECTRONICS and LANDSEA GREEN

0.15

Correlation Coefficient

KIMBALL ELECTRONICS  LANDSEA GREEN

Average diversification

The 3 months correlation between KIMBALL and LANDSEA is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and LANDSEA GREEN MANAGEMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA GREEN MANAGEMENT and KIMBALL ELECTRONICS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KIMBALL ELECTRONICS are associated (or correlated) with LANDSEA GREEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA GREEN MANAGEMENT has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and LANDSEA GREEN go up and down completely randomly.

Pair Corralation between KIMBALL ELECTRONICS and LANDSEA GREEN

Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the LANDSEA GREEN. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 85.39 times less risky than LANDSEA GREEN. The stock trades about -0.07 of its potential returns per unit of risk. The LANDSEA GREEN MANAGEMENT is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.10  in LANDSEA GREEN MANAGEMENT on December 22, 2024 and sell it today you would earn a total of  0.00  from holding LANDSEA GREEN MANAGEMENT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KIMBALL ELECTRONICS  vs.  LANDSEA GREEN MANAGEMENT

KIMBALL ELECTRONICS

Risk-Adjusted Performance

Very Weak

Over the last 90 days KIMBALL ELECTRONICS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

LANDSEA GREEN MANAGEMENT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LANDSEA GREEN MANAGEMENT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LANDSEA GREEN reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KIMBALL ELECTRONICS and LANDSEA GREEN

The main advantage of trading using opposite KIMBALL ELECTRONICS and LANDSEA GREEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, LANDSEA GREEN can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in LANDSEA GREEN will offset losses from the drop in LANDSEA GREEN's long position.

The idea behind KIMBALL ELECTRONICS and LANDSEA GREEN MANAGEMENT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.